Seyed Abolfazl Emami Meybodi (PhD in Public law)
Mehdi Shokoohi (EMBA)
Blue ocean strategy is considered as one of the top approaches presented in recent years. The blue ocean strategy is a systematic approach that finds businesses where competing has lost its traditional concept. In other words, refraining from competing by finding a new business space is the main focus of the blue ocean strategy.
On the other hand, any theory or approach in the humanities field requires suitable frameworks for different societies. Even though the blue ocean strategy is one of the most ideal theories in the history of management, the type of frameworks required for its implementation in dominant world systems should be considered. The minds of people familiar with this concept are conditioned such that only a few have ever thought about critiquing this strategy. Thus, this paper aims to evaluate and critique blue ocean strategy implementation in various world governing systems.
Keywords: blue ocean strategy, thesis and antithesis, governing political-economic systems
In today’s strategic concepts, organizational and service areas of corporations are likened to two oceans: blue oceans and red oceans. Red oceans represent the industries and products that have already existed and, in other words, are well-known market segments. On the other hand, the blue ocean represents industries and products that are not available today and are somehow unknown spaces of various business areas. Researchers in the blue ocean field such as Kim and Mauborgne1 believe that the only way to win the competition is to stop competing in the brutal red ocean market and to enter an unlimited blue ocean space to create new demands.
Based on the theoretical approach of this research, the main question of this paper is the blue ocean strategy position and interpretation concerning the socialism, liberalism and Islamic fields.
2- Blue ocean strategy thesis and antithesis in governing systems
The main aim of this section is to assess and analyze theoretical and practical compatibilities and incompatibilities regarding theoretical and practical blue ocean strategy foundations which lead to the weakening or strengthening of the blue ocean approach in dominant world macro political-economic systems. Furthermore, the blue ocean strategy thesis and antithesis in the three socialism, liberalism and Islamic systems will be assessed.
2-1- Blue ocean strategy in socialism
The emergence of the blue ocean theory in socialist systems, in terms of the presentation of the idea or syntax of technology, is likely to be a means to increase value for customers, and requires the existence of three fundamental pillars in the macroeconomic pillar of a country, rather than the correct implementation of the blue ocean strategy, which are further explained below:
- Recognize equal rights for all economic actors; because in the event of unequal privileges for each person against the person with the idea (considered by blue ocean), whether for a particular person or group, or for the whole society, first, there will be no motivation and energy for the people with superior ideas and second, in the case of the emergence of an innovative idea, that idea does not go towards the benefit of its owner (the owner of the idea), and will gradually turn a dynamic driven macro economy into a monopolized economy with no initiative.
- Individual authenticity and individual rights: In general authenticity, the society has a reality based nature and individuals have a credit based nature and are subordinates of society, therefore each right is a branch of society, and the individual is the only means to promote society from the present state to an ideal state. Thus, in a natural or real state, during each era, there are only a few individuals without mental constraints and conditional minds that possess unmatched ideas. How can the heavy burden of raising the totality of society be based on a few creative minds? At this stage, two hypothesis can be presented. First, individuals will lose their energy in creative thinking and attempting to bring their ideas into fruition, or in the second case, individuals will continue their efforts and succeed in moving the heavy wheels of progress by themselves which will naturally entail extremely low progression.
- Realization of personal property rights for individuals; the most prominent issue that arises here is the theoretical separation of property ownership and relevant management. In some legal systems, ownership is recognized for each individual but it separates property from property management which removes practical management of property from control by its owner and leads to a type of dictatorship and expropriation.
According the statements above, an idealistic socialist country (hypothetical) which is committed to the complete implementation of socialist ideologies, seeks to establish the principle of totalitarian origin, state ownership and social justice (equality) in all its economic aspects in absolute terms and without regards to any privilege, stimulates the thoughts of blue ocean strategy theorists. The following macroeconomic system example with a socialist management system can help clarify the subject.
In 1969, a man named Mil Ov, a worker in a steel and iron manufacturing company, applied a simple initiative and reduced the long route of molten and base material cooling while reducing the amount of energy required to cool down the material. After a while, he completed his innovation and designed a device that reduced energy and costs by three fifths. He asked the authorities to give him a share of profits resulting from total savings. But after a year, this device was nationalized by the USSR parliament and was mass produced.
In another example, a farmer named Lentony Lavrov implemented a new combine harvester that worked mechanically without the need for fossil fuels. He addressed a government center to record his innovation and request mass production. When his request was denied, he threatened to mass produce his product by himself. Lavrov’s actions led to his arrest, a 4 month prison sentence and the seizure of his original device.
These examples clearly illustrate the blueprint of the blue ocean strategy in the socialist economic system and clearly show the lack of growth and authenticity of the blue ocean position in this economic doctrine. Although, it should be noted that a school of socialism, later developed, was not serious about the ideals of socialism in the implementation of socialist principles, but also considered the common socialist principles as red lines for their constitutions.
2-2- Blue ocean strategy in liberalism
As discussed in the context of liberal-dominated political-economic systems, liberalism, like socialism, has principles, foundations, and beliefs that are difficult to violate. Principles such as: the minimalist intervention of the state (gendarme government), maximizing personal interests and relevant economic behavior, coordinating social interests with personal interests, and so on. Generally, it can be stated that even though the blue ocean strategy is not in contrast with liberalism, but there are examples of liberal systems where the implementation of blue ocean ideas are entailed with risks:
- Expropriation (substantive and intellectual property rights) due to public interest: following the French Revolution, the Declaration on the Rights article 117 states that the right to own property is respected and irrevocable and that no one can be deprived of this right except when required to satisfy public needs, with the permission of the law and to settle previous debt. When Napoleon came to power and upon drafting civil law, article 545 was changed from the “public needs” expression to “public interests” which has a broader more general meaning. Paragraph 9 of the preamble to the French Constitution (1946), which is still in force, states: “Nationalization of property and intellectual property is to satisfy public interests. In the French Code of Criminal Proceedings and Special Procedures for the Treatment of Certain Offenses, under article 513, “the seizure of property and rights due to public interests takes place only with a single appeal”. It should be noted that even officials and government officials can apply for expropriation, not from the general public, but from third parties who wish to bring benefits to a specific city or region. This vastness of authority in expropriation, including ownership of ideas, religious and spiritual rights can greatly affect the blue ocean idea which is based on recognizing intellectual property rights.
- Violation of intellectual property rights by the New York Federal District Court: on 22nd March 2012, Mr. Denny Chin, New York Federal District Court judge, issued two verdicts for Google Co. which permitted the scanning of renowned books contrary to copyright laws. The only reason he proclaimed was that society should know and “knowing” is the most important public interest. Even though this verdict brings about a weak point, it has a strong concept in that the American legal system does not have a solid foundation to provide strong and practical support for intellectual rights which is the most essential requirement of the blue ocean strategy.
Overall, it should be noted that in order to successfully implement the blue ocean strategy, countries’ legal systems should defend private and intellectual rights to preserve economic security and the capital of idea owners in light of economic growth and gross domestic income development. Although the structure of liberalist economic systems as a whole is in line with this prominent and recent strategy, but it is also evident that in some contradictory cases there is an absence of a guaranteed structure to protect the intellectual rights of individuals.
2-3- Blue ocean strategy in the Islamic system
The basis of the Islamic economic system is to achieve specific goals in each executive economic system. In any case, regarding the thesis and antithesis of the blue ocean idea in relation to the Islamic theoretical economics doctrine, there are no ideological contradictions to the blue ocean strategy because private ownership is recognized both as an independent right and as a requirement. Regarding the rules of jurisprudence, the point that is brought to the attention of blue ocean ideologists are the principles of rejection and non-believers along with the existence of secondary judgments since these principles seek to prevent losses for individuals and in particular the general public, and if, in the face of new ideas or opinions, there are causes for recession in other businesses and economic activities, or there is a danger of bankruptcy for a particular business field, a verdict (fatwa) is issued by jurists to determine the exact position of the blue ocean strategy in the Islamic economic system. In the principle of rejection which seeks to prevent any non-believer domination of Muslims, and in the existence of a right of non-believers against Muslims, there will be grounds for a subjective or harmful relationship, therefore Muslims have the right, with the permission of a religious ruler to temporarily impose on that right as a secondary verdict. In this regard, it should be noted that the reciprocity of violating the rights of individuals for the interest of Muslims or the continuation of recognizing the right of individuals to the detriment of the community as a whole, may be revoked by a secondary order. However, the cases mentioned above and the contrast between public and individual interests has only occurred three times throughout history and it is possible to consider the blue ocean strategy in line with jurisprudent goals and rulings.
3- Discussion and conclusion
Blue ocean strategy, as a modern and revolutionary theory, offers the elimination of competition from the market by providing value for customers or reducing (or eliminating) an unnecessary feature, or at an exceptional and specific stage, creates a new demand and response that others (rivals) do not possess. This strategy, at its foundations, requires the recognition of intellectual property in its entirety, to the extent that, the absence of this recognition by the government and rulers, results in nullifying the efforts and innovation provided by blue ocean strategy ideologists which will ultimately deter other individuals from innovation and putting in the energy to bring innovations to practical fruition. In today’s world major political-economic systems, including liberalism, socialism and Islam, the intellectual rights required to implement the idea of the blue ocean strategy have been addressed in various ways. In the socialist system, where private property should be neglected to reach a single commune and a non-classified social economy, individuals must reach the “we” stage from the “I” stage. Ownership of work tools, although private, must be neglected, let alone the recognition of intellectual property rights in its various forms. In the liberalist system, it is observed that even though intellectual property is admissible, there is no stable support and protection for intellectual property. If the court or public authorities decide to violate ownership, there are no major obstacles for prevention. In investigating the Islamic legal system, personal and intellectual property rights are generally recognized, but the implementation of these rights has limitations as with other rights, in that it should not harm others or does not lead to the domination of non-believers over Muslims. Finally, it can be concluded that in terms of implementing the blue ocean strategy, there are significant differences dependent on the political-economic system and relevant implementation methods which suggests there are challenges in implementing this strategy. The continued evolvement of this strategy to achieve an ideal state should be of interest for researchers and scientists in various fields.